Subsidy plan to boost rural phones

Mobile services will soon be available at lower rates to the rural customers, thanks to the industry regulator finalizing recommendations for rural telephony that involve subsidies for both towers and fibre pipes.

TRAI sources said the expected recommendations will propose a subsidy for telecom operators setting up towers in rural areas, with the amount to be decided by the Universal Service Obligation (USO) fund.

USO is made by contributions from operators that contribute 5 per cent of their revenues to help expand connectivity in remote areas. Only Rs. 6,700 crore of the USO corpus of more than Rs. 20,400 crore has been used so far.

For broadband/fixedline services, an operator setting up optical fibre in rural areas would get a subsidy at the arte of Rs one lakh per kms. It will be distributed over a period of three years.

“We will submit our recommendations within a couple of days,” said Nripendra Misra, chairman of telecom regulatory authority of India.

TRAI has also proposed that USO fund should be restructured to give it more financial powers.

The country’s rural tele-density (phones per 100 population) is only 12% compared to 81.3% in urban areas.